Regulatory stocktake

Status: The Regulatory Stocktake is complete. Follow on implementation work by the Bank is under way.

The Reserve Bank published the conclusions of its stocktake of the prudential requirements for banks and non-bank deposit takers (NBDTs) in December 2015.

The objective of the stocktake was to identify ways to improve the efficiency, clarity and consistency of the regulatory requirements in those sectors. This has led to several strands of work to implement improvements identified in the stocktake.

Information on this work up to September 2016 is covered below. Since then, information on a number of Stocktake follow-ons has been published on separate dedicated webpages, available from Consultations and policy developments for banks.

Follow-on implementation work

On 23 September 2016 the Reserve Bank published a consultation document on the proposed Dashboard approach to quarterly disclosure by locally incorporated banks (PDF 1MB). The Dashboard would involve publication on the website of key information on locally incorporated banks. By presenting this information in one place and in a standardised format, the Dashboard aims to enhance market discipline by making the information more accessible and facilitating comparisons across banks. The consultation document also seeks feedback on various other related matters (including consequential issues arising out of our separate decision to remove off-quarter disclosure statements for branches once the necessary requirements for private reporting to the Reserve Bank are in place). Submissions on the consultation document close on 15 December 2016.

A key matter considered for banks was the content and the frequency of disclosure statements that banks are required to publish. The work on this issue has concluded that disclosure is fundamental to good market discipline, which is a key pillar of the Bank’s supervisory approach. While the Bank has concluded that locally incorporated banks must provide some form of quarterly disclosure, it believes they could do so in a more timely and accessible manner, and at a lower cost to banks. As part of the follow-up implementation work, the Bank will consult on the possibility of a new ‘dashboard’ mechanism for providing these off-quarter disclosures.

The consultation found broad support for most of the Bank’s specific proposals such as improving the drafting and layout of the documents that set out prudential requirements for banks. Submissions were also broadly supportive of a number of technical changes that were proposed in specific prudential requirements. The Bank also received useful feedback on several matters relating to the prudential requirements for NBDTs, and will carry out further work on these. As a result of the stocktake, the Bank will enhance the transparency of its policy-making process by strengthening the communication around it.

Expert Panel

The Reserve Bank formed an "Expert Panel" of Individuals with experience in a range of relevant fields, to help test ideas and provide a broader range of perspectives as the Regulatory Stocktake progressed.

The Panel met five times in total between October 2014 and October 2015.